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NBFC Registration

NBFC registration is obtained as per the provisions of the Companies Act 2013 and the RBI Act, 1934. It plays a significant role in executing the financial functions of our economy. For acquiring NBFC License, all the conditions mentioned under section 45-IA of the RBI Act, 1934 are mandatorily required to be fulfilled.

Package Inclusions–
  • One Stop Service Provider for Securing NBFC License
  • Advisory for Fintech/Traditional NBFC Credit Business Model
  • Assistance in Developing Loan Products and Business Plan
  • Advisory on Business and Marketing Strategy based on Market Analysis
  • Assistance in meeting RBI Compliance
  • Support for Audit and Secretarial Compliance
  • Guidance on Digital Financial Services Marketing
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NBFC Registration - An Introduction

In a video given below, we have explained what NBFC is in a layman term? A complete process of registering a new NBFC, takeover of existing NBFC and how NBFC license can be obtained from RBI.



NBFC (Non-Banking Financial Company) is a widely engaged in financial activities like secured and unsecured loans, investments, Marketplace lending or financial Information service provider or any other business objectives as defined under section 45-IA of the RBI Act. 1934 and Companies Act 2013. NBFC does all types of financing business but does not possess a full fledge banking license. An entity who is willing to start loan or investment business is required to obtain Certificate of Registration (COR) from RBI. The RBI has simplified the NBFC Regulation and now licensing process is much easier than it was before.

NBFC specializes in offering both secured and unsecured loans likewise but not limited to Personal Loan, Business Loan,Auto Loans, gold loan, Assets Financing, Acquisition of Shares, Stock, Bonds, Hire-Purchase, Insurance, Currency Exchange, Peer to Peer lending, hedge funds etc.

RBI has established two separate departments for efficient administration and smooth operation of NBFC. Department of Non-banking Regulation and Department of Non-Banking Supervision. Both these department administered by CGM (Chief General Manager level Executive of the RBI).

Growth and Market of NBFC’s In India

The NBFC has been highly innovative in the lending space since the beginning and has played a vital role in the growth of the financial ecosystem, and it has proved more innovative as compared to the bank. The key factor of NBFC success is customized and personalized loan product, quick processing and customer friendly credit policy. During the year 2019, the NBFC Market share was 18.6%. NBFC will continue to maintain its growth if the following factors widely executed in the business.

  • Customized Loan Product
  • Personalized Customer service
  • Leveraging technology
  • Use of Digital channel of increasing reach
  • Improved and high-level Risk management tools

NBFC Market share is quite low as compared to banks, but still Private lending business has been one of the emerging and profitable business in India.

Financial Year

Growth

2016

13%

2017

16%

2018

20%

NBFC help to meet the demand that remains unfulfilled by the traditional banking system in shorter processing time. Despite the slowdown in every industry, we expect that NBFC will continue to maintain its growth rate. The growth factor NBFC will continue, and Profitability will improve because digital lending/ Fintech as the new industry entered in the lending space of the India Market.

Role and Function of NBFC in India

As recognized by the RBI, the specific roles of the NBFC are as below:

  • Development of sectors like infrastructure
  • Help and increase wealth creation
  • Substantial employment generation
  • To provide finance economically weaker section
  • Helps in economic development
  • A huge contribution to the state exchequer
  • NBFC provide long term audit and specialized credit
  • Helps in the development of financial markets

How is NBFC different from Bank?

NBFC and Banks both are involved in financial activities, but some differences between the two are as follows:

  • Act of Regulation- NBFCs are regulated by the Indian Companies Act, 2013, whereas Banks are governed by the Banking Regulation Act, 1949.
  • Demand Deposits- NBFCs can not accept the deposits, whereas Banks accept the deposits from their customers.
  • Drawing a Cheque- NBFCs cannot issue or draw cheques on its own whereas Banks can issue cheques freely
  • Deposit Insurance Facility- The deposit insurance facility is not available for NBFC depositors whereas it is available for bankers

Classification of NBFC by Activity

  • Investment Credit Company (ICC)- It is formally known as Loan company (LC), Investment company and Assets Finance Company. With ICC License- you can do lending and Investment.
  • NBFC-P2P (Peer to Peer Lending)- Online Platform to collaborate lenders and Borrowers and Manage funds.
  • NBFC-AA (Account aggregator)- Financial Information service provider (Bigger Version of Existing CIC companies)
  • NBFC-MFI- Credit and Loans to the Weaker Section of the Society
  • NBFC-ND and CIC- Investment in shares -Debt in the same group of companies
  • NBFC-IFC- Long term debt to Infrastructure companies
  • NBFC-Factor- Receivable Financing or Bill Discounting
  • Mortgage Guarantee Company- Providing Mortgage guarantee services
  • NBFC-Financial Holding- Created for Banking License
  • Housing Finance Company- Loan for Affordable Housing

Types of NBFCs on the Basis of Liabilities

NBFC Types on the basis of liabilities

NBFC Registration Process

  • Register a Company as per Companies Act 2013
  • Arrange Capital of Rs. 2 Crore /20 million INR (Minimum capital requirement for an NBFC License)
  • Creation of a Fixed Deposit of Rs 2 CR with any Nationalize Bank
  • FDI Compliance as per the Foreign Exchange Management Act (FEMA) - in case of foreign investment
  • Complete documentation for an NBFC license
  • Submission of the necessary documents with FD receipt before RBI
  • Visit the site https://cosmos.rbi.org.in for the Online NBFC Registration application
  • Download NBFC eform from the Website and Submit Online
  • To keep a check on the status of your form or for tracking purpose, you must take note of the SRN.
  • Keep a hardcopy of the NBFC Registration form (indicating the online Company Application Reference Number)
  • Submit all the necessary documents to the RBI Central office

Eligibility criteria for the NBFC license

According to Section 45(1A) of the Reserve Bank of India for any individuals or company willing to start loan or investment business in India, he/she will require a register a company, hire skilled team and also meet the below pre-conditions prescribed for NBFCs. If an Applicant company qualifies, the legibility criteria can apply for NBFC registration with RBI.

  • Directors Profile

    The Directors must have experience in Finance, Credit or Banking.

  • NBFC Business Plan

    The Applicant company must have a detailed business plan for the next five years

  • Owned Fund

    Shareholders in total must have minimum Rs. 2 Cr as a net owned fund; Invested Capital must not be the borrowed fund.

  • Clean Credit History

    All the directors and shareholders must have no write-offs or have not willfully defaulted the repayment of loans or credit fac to NBFC/Bank.

  • Quality of Capital

    The Net owned fund of the promotor must be tax paid, and all statutory compliance of the management of the applicant company must be clean and legally acceptable

    quality of capital metrics

Strategic Factors for NBFC License Success

It takes industry-expert professional acumen to obtain an NBFC license as well as to operate the same. The RBI ensures that the NBFC is operated by best in industry profession possessing necessary expertise and ethical work record. Therefore, it is essential to cover every aspect of the regulatory requirements.


strategic factors for NBFC license success

11 Pointer checklist for NBFC Registration

  • 1. MOA of the NBFC Company

    The object clause in the MOA must be inlined with the Business Plan

  • 2. Certified Copy of Registration Certificate

    The Founders are required to obtain a certified copy of MOA and AOA

  • 3. Income and Identity test

    The Promotors and Shareholders require to qualify the quality of Capital test and also prove that general conduct of Promotors is always good.

  • 4. Net worth Certificate

    Get a net worth certificate of Directors, Shareholders, and Company

  • 5. Clean Banker Report

    Banker report about the initial fixed deposit of Rs 2 Cr with the no Lien remark.

  • 6. Highest Education Proof

    Certification of educational/professional qualification of the directors of the Applicant Company

  • 7. Credit report of Directors and shareholders

    Latest credit reports of Shareholders as well as of directors are required.

  • 8. Experience in the Financial sector

    Make sure to appoint at least one director with experience of 10+ years in the sector of financial services.

  • 9. Underwriting model

    Submission of a detail action plan about the loan products, fair practice code, Technology, credit and risk assessment policy.

  • 10. Organization Matrix

    Need to provide organizational structure and decision-making process for approval/rejection of loan application

  • 11. System and IT Policy

    a. IT and Data Security Policy

NBFC Registration with RBI

The founders are required to follow both offline as well as online NBFC application process to obtain the NBFC license. The Reserve bank of India is an autonomous body, and it has two separate departments to regulate and supervise the function of the NBFC.

DNBR (Department of Non-banking Regulation)

The DNBR is responsible for conducting the Fresh NBFC Registration process as well as is responsible for preparing the regulation and Polices for the NBFC. The DNBR has transparent and innovative assessment process of NBFC Application.

The DNBR will send you an email and a formal notice if they need any additional documents during the NBFC registration process. The RBI expects your submission/response to the given notice within 7/15/30 days as per the NBFC regulations.

  • Assessment of Application Submitted for NBFC License (All Category of NBFC)
  • Investigation of Directors / Shareholders Profile
  • Communication with Applicant Company in Pre-Registration Process
  • Communicates Final Decision to the applicant company with the Approval of Executive Director office (RBI)
  • Regulates & Administer NBFC Business in India
  • Publish Notifications, Circular & Order for NBFC

DNBS (Department of Non-Banking Supervision)

  • DNBS is responsible for post-registration compliance of the NBFC's and other administrative issues.
  • After Approval from DNBR (Department of Non-banking Regulation) collects net owned certificate & bankers report – before they issue you the NBFC License (CoR) in Original
  • Responsible for complying the NBFC Rules and Regulations issued by the RBI
  • Conduct Audit / On-site inspection from time to time
  • Suspend / Cancel NBFC License in case of Non-Compliance with the Laws
  • Educate and conduct a seminar for the general awareness about the NBFC Regulations, Compliance and Business.

NBFC Registration Timeline

 

14 Days

Company registration and Bank Account

 

15 Days Loan Product

Business Plan

 

15 Days

Cor Application

Founders, IOM, Capital Test

 

7 Days

Online Application (COSMOS)

 

100 Days

NBFC License

Approval from RBI After DD

What are the Steps in the NBFC Registration Process?

Before filing the application for COR (Certificate of Registration), one should read the following checklist of NBFC registration Process.

Step 1 – Hire NBFC Registration Consultants

  • Experience Matters

    Select an experienced consultant experience in NBFC & Banking laws with Minimum 10+ years.

  • Credibility

    An NBFC Consultant firm should have a good team size of 100 to 150 with a combination of professionals like CA, CS, Senior Bankers and Lawyers.

  • Verify Reference

    The reference check is important in case you engage a consultant who does not have expert knowledge of NBFC regulation. It may lead to rejection of the application by the regulator.

Step 2 – Business Plan

  • Founders and Executive Summary
  • Loan Product Plan for 5 Years
  • Credit and Underwriting process map
  • SWOT Analysis
  • Credit & Risk Model
  • Competitors Analysis
  • Lending model – Digital / Branch Model
  • Financial forecast

Step 3 – Application for CoR (Certificate of Registration)

  • The middle name of the company must have Finance, Finserv, Final, Investment, Capital, Fintech, and Leasing etc. For Example, Enterslice Capital Private Limited
  • Create a Fixed Deposit of Rs. 2 Cr with a scheduled commercial bank
  • Verify the backgrounds of promoters
  • Necessary documentation for obtaining an NBFC license
  • Submit an online COR application on the Website of RBI (COSMOS); thereafter a CARN will be generated
  • Physical submission of application with the regional department of RBI
  • RBI will scrutinize the submitted application and COR will be issued.

Benefits and Business Opportunities after NBFC registration

The business environment in India is favourable for NBFC for their exponential growth. Financing business in India is highly regulated by the Reserve bank of India. Hence NBFC registration offers many benefits. A Registered NBFC helps to gain the confidence of borrowers, offers you the security of capital invested in the business.

  • Lowest Legal and Business risk
  • Higher confidence of customer after Grant of NBFC license
  • Easy to Raise Investments in NBFC
  • Access of CIBIL/Other Credit Bureaus data
  • Open Interest Rate without any Cap
  • Free to charge Processing Fees–No Cap
  • Protection by law for recovery of loan
  • Easy Bank Finance
  • Up to 100%, FDI Allowed
  • Leverage of technology and Low Operation Cost
  • A decline in NPA/ Bad Loans due to credit reporting to Bureaus

Factors of Success for NBFC

  • 1
    Highest Fintech Adoption Rate

    India has the highest Fintech Adoption Rate
    in the world at 87%

  • 2
    Second Highest Internet Penetration Rate

    India has the 2nd Largest Internet User-base and 1.2 Billion Smartphone Users

  • 3
    Regulatory Support

    Introduction of “Unified Payment Interface” or UPI with routine policy support

  • 4
    Infrastructural Advantage

    India is the world’s 3rd Largest and fastest-growing startup hub, with over 26000+ startups projected by 2025

  • 5
    Largest Unbanked Population

    India has the largest population of unbanked people and banking dormancy rate of 43%

  • 6
    Best in Industry Talent

    India had tailor made and best in industry finance and IT professionals to suit the needs of Fintech NBFC’s

  • 7
    Smart Country Initiative

    Smart infrastructure for the country. development of Smart Cities and the launch of the Digital India movement

  • 8
    Smart Consumers

    The number of smartphone users in India stands at 1.2 billion. This set of class represents around 93 % of the country's population

RBI Regulations for Non-Banking Financial Companies

RBI Regulations for Non-Banking Financial Companies

The certain compliances are followed after the NBFC License process is completed. There are various guidelines, circulars, and notifications, from the RBI, published in the public domain from time to time, which required to be complied with mandatorily, such as:

  • Statutory Audit
  • Income Tax Returns Filing
  • Tax Audit
  • GST Returns Filing
  • ROC Returns

NBFC Multi Regulator Model

Unlike UK,India works on a multi-regulator model. There are certain class of NBFCs regulated by other regulators than RBI.

NBFC Multi Regulator Model

All other Compliances/Returns required by a competent authority.

  • RBI compliance for NBFC
  • Adoption of Fair Practice Code
  • Secretarial compliances
  • CIC Registration
  • C-KYC Registration
  • COSMOS Registration
  • CERSAI Registration
  • FIU-IND Registration
  • File NBS-9 on COSMOS, the online platform of RBI
  • Compliance of KYC Anti-money Launderings.

Fresh NBFC Registration vs. Takeover of NBFC

Applying for new NBFC Registration online with is always a better option than a takeover of NBFC. The registration of NBFC is simpler than before. This is especially for Foreign Companies, who intends to enter into the Indian Financial service market.

We always advise them to apply for the new NBFC registration application instead of buying existing NBFC.

Advantages of Fresh NBFC Registration above NBFC Takeover

  • Low Legal Risk

    In case of NBFC takeover, past Non-compliance of the target entity with the RBI Act may lead to cancellation of the NBFC License.

  • Timeline

    Fresh NBFC Registration can be executed in a period of 90 to 120 days, whereas an NBFC Takeover usually takes 150 to 300 days.

  • Title Risk

    There is no risk of ownership after the new registration of NBFC. You are the first shareholder of the company while in case of existing NBFCs, you will be unable to establish the precise title of shares.

  • Tax Liability

    Entities are responsible for a tax liability of existing NBFC they are willing to take over.

  • Capital

    In case of new NBFC License application, you may need to block your Rs. 2 Cr / Rs. 20 Million FD in Bank Account. However, the proposed shareholders are required to submit the bankers report in a case of NBFC takeover. The report should state that the bank balance is equivalent to the book value of the shares.

Risk Management Process

Process of Risk Management

What are the Benefits of Fintech Based NBFC Business Model?

The integration of new age technological advancements with financial business operations is reaping numerous benefits to the economy. There are many advantages to doing so, such as:

  • Addressing customer problems using technological advancements
  • Online loan facility
  • Working on financial inclusion app
  • Creating space for the alternative digital banking system, disrupting conventional business models facing significant legacy issues
  • Use of Big data, AI & Machine learning tools to minimize the fraud

Benefits of Fintech Based NBFC as an Alternative Lending Model

  • Reduction in Operation Cost

    Fintech based NBFC make extensive use of the technology and IT infrastructure. Hence, the operating cost reduces significantly.

  • Broad Reach

    Fintech NBFC can target a diverse pool of customers beyond geographical limitations. This advantage is outside the scope of the conventional banking system.

  • Higher ROI

    Fintech based NBFC has a higher fund cost in comparison to a bank. However, it enjoys a lower customer acquisition cost and lower servicing cost than banks.

  • Lower NPA than Bank

    As per the prominent market experts NPA of NBFC’s is lower as compared to bank.

Penalty for Non-compliance as per RBI regulation

The Reserve Bank has the authority to impose a penalty on NBFCs for violation of the provisions under the RBI Act. Such penalty is as follows:

  • The business when carried without a certificate of registration, the Reserve Bank can impose a fine of not less than one lakh rupees which can extend up to Rs. 5 lakh or twice the amount involved in such contravention, whichever is more.
  • The business carried without a certificate of registration is an offence which is punishable with imprisonment of not less than one year.
  • If the default is continued by the company, then penalty imposed up to Rs.25,000 per day after the first day of such default.
  • In case of any other contravention, a fine imposed of a maximum of Rs. 5,000 by the Reserve Bank.
  • If there is non-compliance with the orders of the Company Law Board is punishable with imprisonment up to three years and a fine of not less than Rs. 50 every day during which such non-compliance continues.
  • If any auditor fails to comply with any direction given by the Reserve Bank, he will be punishable with a fine up to Rs. 5,000.

Why Enterslice?

  • 400 + NBFC Clients
  • 100+ Fresh NBFC Registration
  • 300+ Team of CA/CS/Ex-Banker
  • 500+ Cities Served
  • 24X7 Customer Service
  • 9 Customer Score
  • 98% SLA Delivery

Our Timeline

 

2014

5,000+ Clients

20% Share in NBFC Advisory business and 90+ NBFC Clients Acquired in one Year.

 

2018

150+ Team & 100+ CA firm

Expanded well and record CAGR 200%

 

2019

53,000+ Clients

300+ In-house Team + 22 Offices + 1000+ Network of Professionals + 70% Market Share.

 

2020

Target 100,000 Clients

500+ Team, 90% Market Share and 30+ offices

If you have any additional questions, please feel free to write at info@enterslice.com or fill the enquiry form as mentioned above, we shall get back to you.

Enterslice Advisory Services for NBFC?

  • Advisory for Fintech Based Digital Lending businesses
  • Assistance in the SOP of the Organization
  • Assistance in designing loan product
  • Finalizing reporting formats from various verticals of the organization
  • Assistance in developing Company Policies
  • Virtual CFO Services for the NBFC
  • Providing Assistance to the founders in the preparation of the market strategy
  • Assistance in the fundraising process
  • Assistance in meeting secretarial compliances
  • Assistance in meeting RBI Compliance
  • Advisory on Adoption of Ind-AS and IFRS
  • Internal Audit Services

How Enterslice will help you to get NBFC Registration?

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Frequently Asked Questions

Non-banking financial companies’ aka NBFCs are the financial institution that deals in financial services. NBFC institutions offer several financial services without having any banking license. They are allowed to involve in financial activities under section 45-IA of the RBI Act.

NBFCs are managed by different financial bodies of India such as RBI, IRDA, SEBI, National Housing Bank, and Department of Company Affairs. NBFCs deal in various aspects of financing, and they are regulated different financial bodies as per their nature of the activity.

Not every NBFC is required to register under RBI, but they are sure to register with the respective regulators they are regulated by. For example, Nidhi, Chit, National Housing Bank, Insurance companies are also NBFC, but they are regulated under different laws.

For NBFC registration, there is a requirement of minimum capital of Rs. 2 cr; therefore, an applicant needs to register a company with the prescribed capital along with the requisite government fees.

NBFCs offer various banking and non-banking services to the people in need. They do not own a banking license for the services they render but follow the rules and regulations adhere by RBI. Reserve Bank of India regulates and supervises the functions of NBFCs according to the provisions mentioned in Chapter III B of the RBI Act 1934. Only a registered NBFC can commence its operation in the market.

NBFCs can accept or renew deposit for a minimum period of 12 months. However, an NBFC cannot accept demand deposit and is not liable to issue cheques.

RBI has the authority to cancel the certificate of registration, in case, if any company is not happy with the RBI order then it has the right to file an appeal against the order within the period of thirty (30) days from the date of the order of cancellation of the certificate of registration communicated to the company.

The list of registered NBFC is available on the official website of RBI. One can check the NBFC registration number by visiting www.rbi.org.in.

Reserve Bank of India has defined the term Net Owned Funds (NOF) under section 45-IA of the Reserve Bank of India Act, 1934. As per the act, it means:

The accumulation of the paid-up equity capital and free reserves as disclosed in the latest balance sheet of the company post deducting the following items from it:

• Accumulated balance of loss

• Deferred revenue expenditure

• Other intangible assets

The final amount is further reduced by the following:

Investment of such companies in the shares of its subsidiaries, same group companies, and other Non-Banking Financial Companies; andthe book of value of debentures, bonds, outstanding loans and advances (including hire purchase and lease finance) made to, and deposits with its subsidiaries and companies within the same group exceeding 10% of the amount calculated in (1) above.

As per the guideline provided by the RBI, Net Owned Funds at the time of takeover should not be less than INR 2 crores

NBFCs raise funds by borrowing money from banks, or they sell commercial papers to mutual funds to raise money. They provide this money to small and medium business enterprises, retail customers, and so on.

Any business that fulfils the following criteria is eligible to apply for NBFC license:

Is registered under the Companies Act 2013 and has the minimum capital of INR 2 crores

It is not mandatory to get NBFC software; you can get it once you are licensed.

An NBFC company cannot take a loan to meet Rs 2 crore requirements.

Yes, you can use an initial fixed deposit but for a specified period of time.

Well, it is necessary to have a certain amount of experience to get this license.

Yes, it is necessary to hire an NBFC consultant.

It should not be less than INR 2 crores though limit can exceed.

NBFCs stand for Non-banking Financial Institutions. NBFCs are those entities or financial institutions which offer certain bank-like and financial services, although they do not hold a banking license. Some examples of NBFCs include investment banks, mortgage lenders, money market funds, insurance companies, hedge funds, private equity funds, and P2P lenders.

A company registered by the Companies Act, 2013 and desirous of initiating business of non-banking financial institution as defined under Section 45 I(A) of the RBI Act, 1934 must comply with the below things:

i) It must be a company registered under Section 3 of the Companies Act, 2013.

ii) It must have a minimum amount of net owned fund of ₹ 200 lakh (The minimum net owned fund (NOF) required for specialized NBFCs like NBFC-MFIs, NBFC-Factors, CICs is indicated separately by RBI on specialized NBFCs).

Unlike banks, NBFCs are not allowed to accept such deposits which are repayable on demand. Banks form an integral part of payment and settlement cycle while NBFC, is not a part of the system.

Some necessary documents include Certificate of Incorporation, updated KYC of the Shareholders and Directors, Net-Worth Certificate of directors, shareholders, and the company, education and qualification proof of the directors, company’s PAN & GST number, documents in support of the address of the company, details of the bank account of the company, the board’s resolution approving the formation of NBFC, etc.

Although Housing Finance Companies, Merchant Banking Companies, Stock Exchanges, Nidhi Companies, Insurance companies, Companies engaged in the business of stock-broking/sub-broking, Venture Capital Fund Companies, and Chit Fund Companies are NBFCs, however, they have been exempted from the requirement of registration under Section 45-IA of the RBI Act, 1934 subject to certain conditions. These are regulated by different authorities under different prescribed rules.

The RBI has been accorded the powers under the RBI Act 1934 to register, lay down policy, issue directions, inspect, regulate, supervise and exercise surveillance over NBFCs which comply with the defined 50-50 criteria of principal business. The Reserve Bank can also penalize NBFCs for violating the provisions of the RBI Act or the directions or orders issued by RBI.

If companies that are needed to be registered with the RBI as NBFCs; are found to be conducting non-banking financial activity, such as lending, investment or deposit acceptance as their principal business activities, without seeking registration, the Reserve Bank has the power to levy penalty or fine on them or can even prosecute such companies in a court of law.

The regulations applicable to the ND-NBFC with asset size of less than ₹ 500 crore are as follows:

(i) They would not be subjected to any regulation either prudential or conduct of business regulations viz., Fair Practices Code (FPC), KYC, etc., if they have not accessed public funds and do not have a customer interface.

(ii) Those having a customer interface will be subjected only to conduct of business regulations including FPC, KYC etc., if they are not accessing any public funds.

(iii) Those accepting public funds would be subjected to limited prudential regulations but not conduct of business regulations if they have no customer interface.

(iv) If both public funds are accepted and customer interface exist, such companies will be subjected both to limited prudential regulations and conduct of business regulations.

The meaning of public funds is different from that of public deposits.

Public funds comprise public deposits, inter-corporate deposits, bank finance and all funds received whether directly or indirectly from outside sources such as funds procured by issuing Commercial Papers, debentures, etc. However, although public funds include public deposits in the general scenario, it may be noted that CICs/CICs-ND-SI cannot accept public deposits.

There are various NBFC compliances which needed to be followed such as Unaudited March Monthly return/NBS7, Audited March Monthly return/NBS7, Statutory Auditors certificate on Income & Assets, Information about Cos having FDI/Foreign Funds, Resolution of Non-acceptance of Public Deposit, File Audited Annual Balance Sheet and P&L Account, Declaration of Auditors to Act as Auditors of the Company, etc.

RNBC stands for Residuary Non-Banking Company. It is a class of NBFC which is a company and has as its principal business of receiving of deposits, under any arrangement or scheme whatsoever or in any other manner; and not being Investment, Asset Financing, or Loan Company. Moreover, such companies are needed to maintain investments as per directions of RBI, in addition to liquid assets.

The maximum rate of interest that an NBFC can pay to a depositor must not be more than 12.5%. The RBI keeps on altering the interest rates depending upon the macro-economic environment.

The NBFCs are equipped with an option to accept/renew public deposits for a minimum period of 12 months and a maximum period of 60 months. Moreover, they cannot accept deposits on demand.

A significant impact can be seen in the financial markets & BFSI sector due to COVID-19. Credit risk is the major problem which has been arisen due to considerable deterioration in the market, and such disruptions gave rise to liquidity issues. However, in our opinion NBFCs having a business continuity and contingency plan will effectively overcome the impact of this disruption after slow down of outbreak. The Indian government will surely take necessary measures and bring policy measures to strengthen NBFCs post pandemic. For now, it is important to give assurance to the consumers, and industry with capital and reduced interest rates.

Drafting a business plan for NBFC registration is a mandatory requirement to secure profits, to attract investors as well as to secure a loan for working capital. However, without drafting a proper business plan, the organisation would be aimless as no defined objective will be there to achieve.

There are multiple types of NBFC in India, which are as follows:

• NBFC – ICC [Investment & Credit Company]

• Infrastructure Finance Company (IFC)

• NBFC-MFI [Micro Finance Institution]

• NBFC - CIC-ND-SI [Systemically Important Core Investment Company]

• NBFC-IDF [Infrastructure Debt Fund]

• NBFC-Factors

• Mortgage Guarantee Companies

• NBFC-NOFHC [Non-Operative Financial Holding Company]

NBFCs perform multiple functions; some of them are as follows:

• Hire Purchase & Leasing

• Retail Financing

• Rural Financing

• Venture Capital Services

• MSME Financing

• Trade Financing

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" Enterslice use technology better than others. That saves time and money; Team enterslice is more efficient than traditional competitors, and that helps to pass on the cost advantage to its clients. The company is building a high-level transparency in legal services by optimum use of technology and process automation in consulting. I highly recommend this company. "

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Nilanjan Bandyopadhyay
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" Excellent advisory role by Enterslice Team. They are a trusted partners to us. Narendra and his team helped us with our pre NBFC applications and Post NBFC advisory services. "

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" Amazing services provided by your organization. They have completed our NBFC registration order within stipulated time period of 90 days. They provide constant guidance and support in the process. Their support in building fintech software is amazing. "

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